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Author Archives: MS Licensing

Predicting the future…

08 Sep

Not an easy task.  When my kindergartener teacher asked “what do you want to be when you grow up?” I can promise you SPLA was not part of my vision.  (I should’ve worked harder to be a firefighter)

This post is 100% opinion based and would love the opportunity to hear/read yours. So here’s my take on SPLA and what’s next for the hosting industry.

Who will win the Amazon/Azure War? 

Contrary to popular opinion, I think Microsoft has already won this battle.  The reason might surprise you too as it has nothing to do with the service offerings or pricing; it has everything to do with who controls the licensing. I think we can all agree that Microsoft can make up their own rules to their own software.  What happens if Amazon spins up a Windows VM in their datacenter?  Amazon has to report it via SPLA.  Who ultimately get’s the SPLA revenue?  Microsoft.  What happens if Microsoft decides to offer fully hosted Windows 8 desktops using Azure or Office 365 but NOT authorize if for other service providers?  Yikes!!!  What happens if Microsoft authorizes MSDN mobility rights but not offer it for other service providers?  Oops…already happened.  What happens if they allow Office to be installed on 5 devices?  Oh man.

Will SPLA be replaced?

No.  Too  much revenue being generated for SPLA to just disappear.  SPLA produces recurring revenue for both Microsoft and the partner community.  Secondly, using SPLA does not mean that volume licensing is going away; Microsoft get’s the best of both worlds.  I do foresee volume licensing changing more rapidly than it already has.  I think that’s a good thing too.

Will VDI be allowed under SPLA in the foreseeable future?

No way.  This will never happen in my opinion. Let’s throw in the towel on this one.

Will the cloud industry expand or contract over the next decade?

Expand.  I think organizations will not only have hybrid/cloud environments but multi-cloud environments. As an example, I have multiple software vendors (such as Adobe for PDF’s, Symantec for Security, Microsoft for Office, etc) I believe organizations will use several vendors in “cloud” paving way for those service providers that have specialization and unique offerings to gain market share.  Yeah, they might not be the next Amazon, but they will be critical to the next phase of cloud. Specialization = Profitability.

Are all service providers going to be audited?

Yes.

Do I need to have a SAM practice?

Not if you don’t believe me in the previous question. Just don’t cry and say I didn’t warn you!

What will be the biggest driver to the cloud?

On premise compliance audits.  Once they get audited, they would rather have someone else worry about it; that someone else is you.

Will License Mobility be allowed for Windows?

No.  I don’t think there is a reason why it would.  Windows is cheap.  For those that have hosted for a while, remember the Windows Outsourcer/Non Outsourcer SKU’s?  Datacenter was over $200 a processor.  Standard was over $75 (US).

Will Microsoft raise rates?

Yes.

Will my hosting business succeed since I can’t compete against larger providers?

Yes.  You  need to change the way you promote your offering.  Think about this (and be honest with yourself) – what separates you from your competition?  If you were a customer looking for a hosted solution…why would “they”… choose “you”?  How can YOU… help ME (customer).  Is it to keep compliance?  Is it costs? Do your employees bring you new ideas or are they collecting pay checks?  Do you worry about being the lowest price or quality/uniqueness of your service?   Is it because you have an “in” and listen to SPLA Man?  If it’s the latter, you will win for sure.

Who’s the biggest threat to cloud providers present/future?

Governments

Will VDI be allowed under SPLA?

NOOOOO!!!!!  You asked this twice!  Come on! 🙂

Who will win the World Series in baseball?

Why…the St. Louis Cardinals of course!

Who will NOT win the Super Bowl this year?

St. Louis Rams – Ugh.

Thanks for reading,

SPLA Man

 

 

 

 

 

 

 

 
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Posted by on September 8, 2014 in In My Opinion

 

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Hybrid, Dedicated, and Shared Scenarios…

27 Aug

There are three deployment options for service providers – Hybrid (mix of on premise and cloud) Dedicated, and Shared.  In this article, we will break each one down to explain how they work and the options available.

Dedicated Scenario – (3 options available)

Option 1
Your customer decides to bring their own software (such as Exchange) and infrastructure (Windows) via their own volume licensing agreement. They do not have software assurance on the software. Can they do this?

Yes. Why? Everything is dedicated. Server, virtual machine all dedicated to one single organization. Software Assurance is NOT required.

Option 2
Your customer decides to bring the software but the hoster will provide the infrastructure in a dedicated environment. Again, customer does not need Software Assurance if it’s a dedicated environment. In this scenario, the hoster (you) will provide the Windows license via SPLA and not report the other applications the customer brings over since it is already covered via their own volume licensing agreement. This is applicable, it’s dedicated (VM and physical servers)

Option 3
Your customer is a healthcare company that needs a dedicated environment due to regulatory compliance. They do not own any software; they would need the hoster to supply the software licenses. Can they (the hoster) do this? Yes, the hoster would report everything under SPLA. The hoster (you) CANNOT use your own volume licensing agreement to provide the solution but you can certainly provide SPLA. Please be aware that if you own a volume licensing agreement, you cannot use the same hardware your volume licensing agreement resides as your hosted solution.

Also keep in mind that SPLA is non perpetual, when the customer leaves, they can no longer use the software they were accessing.

Summary of Dedicated –
Dedicated is applicable for both SPLA and end customer owned volume licensing. Dedicated also means dedicated hardware and dedicated VM’s. In dedicated environments, the end customer DOES NOT need software assurance. From a compliance perspective, it is defined as the following:

“Any hardware running an instance of Microsoft software (OS or application) must be dedicated to a single customer. For example, a SAN device that is not running any Microsoft software may be shared by more than one customer; since, a server or SAN device that runs Microsoft software may only be used by one customer.” (source: Microsoft VDA FAQ)

Hybrid Scenarios – 3 options available

Option 1
You decide to offer your customer a shared infrastructure but they want the same applications to run on premise. A good option would be to have the customer purchase the server applications (think Exchange, SharePoint, Lync) with software assurance (SA) and run them on premise. You (the service provider) would run the same applications in your shared environment BUT report the SAL for SA SKU. Much cheaper option than standard SPLA prices. I wrote about this here This also works well for Disaster Recovery options.

Option 2 (not really a hybrid but just go with it)
You can use license mobility. Microsoft likes to define this as a “hybrid option” but to me, hybrid insinuates the ability to run on premise and in your cloud. License mobility is a SA benefit for certain applications (SQL, CRM, SharePoint, Exchange, Lync) that allows customers to leverage their investment in SA and transfer those licenses into a hosters shared infrastructure. Reason why I don’t think this is truly a hybrid is the customer is TRANSFERRING licenses into your datacenter. This means that if a customer wants to move back to their own datacenter, they have to wait 90 days. (transfer license rule). With SAL for SA, nothing is being transferred. Windows does not have mobility rights, this will need to be reported under your own SPLA. I wrote about license mobility many times – here’s an article for your review – here You can also check out the Microsoft site for more of a definitive definition http://www.microsoft.com/licensing/software-assurance/license-mobility.aspx

Option 3
Good Ole’ SPLA. Customer can run their own servers on premise, you just report SPLA licensing in your shared environment. The new SPLA agreement even allows you to run SPLA software on customer owned hardware as long as you still manage it.

Shared Scenarios – 2 options

Option 1
License Mobility – see above

Option 2
SPLA. We all know what that is.

Summary

I hope this brings a bit more clarity. Sorry if some things are redundant but at the same time, some things are simply worth repeating. Here’s the takeaway – customer’s can always bring licenses into your datacenter. There is no law of the land that prohibits this. What is prohibited is the way you deploy the technology. There is only one option to install customer owned licenses in a shared environment and that is license mobility. Again, (here I go being repetitive) if Microsoft allowed customer owned licenses to be installed in shared environments than why would they create license mobility?

If you still have trouble comprehending all this, shoot me an email located at the top right of this page. One general rule of thumb – if it’s shared – 90% of the time SPLA is required.

Thanks for reading

SPLA Man

 
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Posted by on August 27, 2014 in Compliance, License Mobility

 

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It’s a bird…it’s a plane…it’s VDI and SPLA!!!

13 Aug

We have all been there. You see an email come across in the subject line that you’ve seen before. You release a loud sigh, because you already know the response to the email before you even open it. How? Well you’ve been asked the same question before on numerous occcassions and give the same response. For me in particular, the subject in the email is “SPLA and VDI”  It’s not frustrating, it’s just I hate saying “no”  (just ask my son – a bit spoiled I admit)

I try to write about different topics, but I also like to give updates and understanding to various topics that really hit home; VDI is one of them. You can read my previous article here  In this post, I will break VDI into two parts: defining VDI and moving forward.

Definition –

What is a virtual desktop in the licensing world? You should think about virtual desktop as a software assurance benefit. Like license mobility, software assurance is required. Unlike license mobility, there is no option to install in shared infrastructure. Let me repeat – no option to install in shared infrastructure. One more time…no option to install in shared infrastructure. What are the options?

Since VDI/VDA is a software assurance benefit, your customer must purchase their desktop OS with software assurance to have VDI rights. That means if they did not purchase with software assurance, there is no option for them to use virtual desktops from a true licensing perspective. What if the machine is a dummy terminal with no software assurance option available? The end-user would be required to purchase a VDA license for each device. VDA license is kind of like a device CAL, it just provides the user access to a virtual instance. If your customer has not purchased VDA or software assurance on the OS, they need to reconsider if they want a virtual desktop.

Some service providers are under the impression that they can sell a desktop OS perpetually to the customer and host it for them in a dedicated environment. They have the dedicated environment part right, but an OS sold to an end-user does not grant that end-user access to a virtual desktop without software assurance (SA). Secondly, you have to be an authorized reseller to sell perpetual licenses (non SPLA) to consumers. Third, you cannot buy a Windows desktop license yourself and host it to third parties. Anything you buy outside of SPLA is for your internal employees only. Last, not only should you not buy licenses and host, but do not install on servers that is also used for your internal use. That is a big compliance headache.  Where is it written that you cannot host on servers internal employees are also accessing?  It’s not.  That’s what makes it a headache.  Just don’t shoot the messenger!

So why can’t the end-user just go to Best Buy or some other retailer, purchase a retail copy, have you (the service provider) host it for them? That not only is a compliance risk, it is also not very economical. Download the FAQ guide here

Moving Forward

What are your options?  The good news is Azure, AWS, and all the others have the same rules.  They cannot offer desktop OS in the public cloud.  This is probably the best FAQ guide I’ve read around Azure and it applies really to all IaaS providers.  Check it out here

What you can do is offer Windows Server to emulate a desktop using RDS.  I get it, not the same thing but I think it is a more of a compelling solution from a cost perspective (and be compliant).  Dedicating a physical server and virtual server is not always the most profitable solution.  I’ve said this before, I think the bigger issue is Office.  RDS now has mobility rights, I think Office should too.

My Opinion

If I was a service provider, I would work with someone who is an expert in SPLA based licensing and an expert in software assurance benefits.  As you can see from my previous posts and with VDI, software assurance is a requirement for most cloud based licensing solutions.  In years past, SA (Software Assurance) was only leveraged for organizations that wanted the latest version on software and pay annually for the licenses under their agreement.  The “cloud” has changed that.  Fast forward to today and customers want to move to the cloud but leverage their existing licenses.  Have you been asked that before?  How do they accomplish that?  The answer is Software Assurance.  They need SA to use license mobility, they need SA for VDI, they need SA for hybrid scenarios such as the SAL for SA SKU’s, and they still  need SA for latest version rights and pay annually.  If I was a Microsoft shareholder, I would applaud that move.  It’s a way to add additional revenue on top of the licenses they purchased all the while giving customers the benefits they are after.

So if you ask, “why does Microsoft not allow VDI in a shared environment?”  My answer is “why would they?”

Thanks for reading,

SPLA Man

 
2 Comments

Posted by on August 13, 2014 in VDI

 

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Help me SAM!

11 Aug

I was on a call the other day and the customer was pleasantly surprised to learn about the SPLA program. Although I do not manage the program in its entirety like the old days, I will say this was a refreshing surprise. When you mention SPLA to a customer, account manager, or even Microsoft, more times than not you here a groan. ABS – Anything But SPLA! I am sure if there are resellers reading this, they would probably agree. Why no love for a program that is growing exponentially year/year? What are better alternatives…buy the licenses outright?

I don’t think the issue is with the program itself; after all, the ability to get started with zero upfront costs from a licensing perspective is pretty cool! I don’t even think the licensing is all that difficult once you get started. The pain point is understanding all the “gotcha’s” and the “in’s” as well as all the “outs” to make sure what you are doing is both compliant and cost-effective.  SPLA is an honor based system, but if you are found dishonest, it will cost you.

One of the biggest hurdles is tracking licenses. With the release of Azure, license mobility, and regular SPLA licenses, the ability to track licenses is becoming more complex.  End customers do not want to double pay for licenses already purchased and service providers don’t want to report SPLA if they don’t have to.  So what do you do?

That’s where my old friend named Sammy comes in. On premise customers have used SAM (Software Asset Management) for years as a mechanism to track licenses purchased and/or deployed.  This is not a one time snapshot, (although I guess it could be if you want it to be) but an ongoing strategy to make sure licenses are being consumed properly.  If they are not, at least they catch the problem before they get audited.

Service providers are different; very few have a SAM strategy.  Most service providers are taking part in license mobility and customer owned licenses more regularly. If you don’t believe me check out all the license mobility partners on Microsoft’s website.  If you thought SPLA is complex, try combining on premise licensing and SPLA and see what you have!

What does SAM really do? It’s a strategy. It will give you tools and a team of experts to help guide you through the ever-changing license use rights (SPUR or PUR for those playing at home).  In most cases, it provides you with the necessary resources to help protect you from vendor audits.  There are different levels of SAM to cater towards different types of environments.  Just like service providers, no two environments are the same.

Here’s my advice (if you are wondering) – if you are a service provider, get a SAM strategy in place.  There’s a saying I read somewhere ( I believe LinkedIn) that said if you think audit prevention is expensive, try being audited.  (paraphrased here but you get my point).

If you don’t have a SAM resource, email me, (blaforge@splalicensing.com) I can be your SPLA/SAM resource.  I guarantee I know the program better than most.  You can also check out our SAM services at SoftwareONE here

As always,  hope you find this helpful and gives you some ideas.

Thanks for reading,

SPLA Man

 
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Posted by on August 11, 2014 in Compliance

 

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Datacenter Outsourcing

07 Aug

I’ve written before on how partnering with an established provider can save you money, especially as a short term solution to get your hosting business started.  What I haven’t really addressed is the licensing.

Data Center Outsourcing is essentially what the name applies.  “Data Center” and “Outsourcing”; you outsource your data center. Amazing how that works.  Microsoft definition is a bit more confusing – amazing how that works too. From the outsourcing guide:

  1. “A Data Center Provider is a Service Provider that provides Software Services, usually IaaS, to another Service Provider using Products licensed from Microsoft through its own SPLA..”

Microsoft Azure is a good example of a data center outsourcing company.  When you sign up for Azure, Windows will be included in the service.  They are essentially providing the infrastructure (Windows and/or SQL cores) and you provide the application licenses via your own SPLA.  When you leverage another service provider who provides the infrastructure, they must be providing the Windows licenses. Hmmm…here’s why.

Let’s say you have a signed SPLA agreement to offer Exchange to your clients and you decide to use Brett’s Hosting to provide the infrastructure.  Brett’s Hosting offers a public cloud environment (multiple customers sharing same resources).  Under this model, you will report Exchange licenses for each user that HAS access to the software and NOT report Windows under your own SPLA; Brett’s Hosting would report Windows via their own SPLA.  Why?  If it is a shared environment, there is no way Brett’s Hosting can allocate processors for you to report it.  SQL cores works the same way.  Still don’t believe me?  Check out the FAQ guide from Azure here. Notice under SQL it states you can purchase a VM or use SAL licenses.  Notice under Windows it states Windows is included with your agreement.

Here’s the bottom line, if you decide to outsource your data center to a public cloud provider, ask them how they manage the Windows OS.  If they say it is not included in the cost of the service and you should be providing the licenses, they are out of compliant.

Want more proof?  Download the outsourcing guide here

That being said, if you provide data center outsourcing services, I think you are in the right business. This is the fastest growing area within the hosting industry.  Windows is relatively inexpensive from a licensing perspective, especially as you add more VM’s and can capitalize on the Data Center edition.  (remember…unlimited VM’s).  SQL can get a bit more complex, but if you understand it I think that could be an added value over your competition.  Last, because you report Windows and SQL only and let the service provider control the user based licensing; it limits your compliance exposure.  (processors/cores are easier to track).

So are you a data center outsource or a service provider?  Do you work with someone to resell your solution or do it alone?  Would love to learn more about your offerings. If you need guidance or best practices or just want a second opinion from a licensing perspective you can email me at blaforge@splalicensing.com.

Thanks for reading,

SPLA Man

 
1 Comment

Posted by on August 7, 2014 in Data Center Outsourcing

 

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Back to the basics

22 Jul

Now that Microsoft has wrapped up their fiscal year, I thought it would be a good time to take a step back and review the basics of the SPLA Program.  In this post I will highlight who uses SPLA, why SPLA, and who should not use SPLA.

Who should sign a SPLA agreement and why does it exist?

If you are hosting Microsoft software on behalf of a third-party; this is SPLA.  Let’s break this down a bit to try to make sense of this statement.

What does behalf of a third-party really mean?  Let’s say I own a company and want my employees to have email using Microsoft Exchange.  I don’t want to build a datacenter nor do I have the technical knowhow to administer a server.  So what do I do?  I contact a service provider who hosts  Exchange.  He/she informs me that I can pay a small monthly fee and my employees can have email.  As with every Microsoft licensing program, to access any server you will need a license.  The license to get access to a service provider’s server is called a SPLA license.   It’s non perpetual, non transferable, and in fact, being a customer I probably wouldn’t even know I am really paying for it.

So why couldn’t the service provider use his own licenses to host this solution?  Well for one, it’s part of the PUR (Product Use Rights) “No commercial hosting” but it’s really more than that.   Why would I want someone else accessing a server that I paid for?  Not only that, but using a volume licensing agreement (non subscription) is perpetual.  If you decide to buy Client Access Licenses (CAL’s) for all your customer’s, what happens if they leave?  You cannot return the licenses; you would be stuck with them.  Not only do you have to use SPLA from a compliance perspective, you really should use SPLA if you are indeed hosting software.  I wrote a blog about separate hardware and all that fun stuff here

Who Should Not Use SPLA

If you have external users just viewing information or if you created an e-commerce site to sell your own products; that’s not SPLA.  Yes, external users are accessing, but if you are not hosting software for another organization, volume licensing external connectors comes into play.  External Connector is defined by the following (page 7 of the PUR).

External Connector License means a license attached to a Server that permits access to the server software by External Users.

External Users means users that are not either your or your affiliates’ employees, or your or your affiliates’ on site contractors or onsite agents.

Let’s use www.SoftwareONE.com  as an example. Why are they not under SPLA?   External users are accessing!  No one is hosting http://www.softwareONE.com, it’s a site to promote our business. We set up a web server, users are accessing it.  This website is used to run our business, not someone else’s.  If we went to a hosting provider and asked them to host our website on our behalf, the service provider would charge us for this service.  Part of that charge would be a SPLA license.  Why? The service provider is hosting a server on behalf (there’s that word again) of our organization.

Here’s some useful links describing external users for some common products in which external users are accessing from TechNet and other bloggers.

Lync – http://technet.microsoft.com/en-us/library/gg398775.aspx

SharePoint – I found this blog helpful http://www.sharepointsharon.com/2013/06/sharepoint-2013-and-external-users/

Great article from my friend and colleague at http://www.Microsoftlicensereview.com around this topic in general.       http://microsoftlicensereview.com/category/external-connectors/

More general terms for Client Access Licenses (CAL’s). I thought this would be helpful if you have customer’s that purchased their own licenses.

http://blogs.technet.com/b/volume-licensing/archive/2014/03/10/licensing-how-to-when-do-i-need-a-client-access-license-cal.aspx

http://www.networkworld.com/article/2230729/microsoft-subnet/microsoft-cals-and-external-connector-licenses-part-i.html

Conclusion

SPLA is not a bad program, in many ways it’s very practical.  Month-month, true up and true down easily, and you can terminate the agreement at any time.  One of the few programs that allows early termination I might add.  If you lose a customer, you are not out any money, since your only paying monthly.

Here’s my suggestion – I would partner with a reseller that understands the program.  Secondly, be sure to consider licensing impacts before implementation.  Too many times service providers will sell a solution and ask about the licensing later.  You need to do the opposite – ask about the licensing than worry about how to deploy.

Thanks,

SPLA Man

 

 

 

 

 

 

 

 
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Posted by on July 22, 2014 in Uncategorized

 

How to reduce your SPLA reporting

09 Jul

It’s easier than you think.  ( and no, I am not saying you should be out of compliant).  The goal of this blog is to educate and help the service provider community with their licensing decisions.  Keep in mind that I do this as a hobby.  I also try not to solicit, as that can be frustrating to the reader. 

That being said, I do know the reseller channel well, I also know the agreement better than most lawyers.  If you are looking to potentially reduce your spend from a reporting perspective, reduce compliance risk, or just simply want to chat about a licensing scenario that can be unnerving, let me know.  Send me a message on LinkedIn or shoot over an email – blaforge@splalicensing.com

So how do you reduce your spend?  That’s a tough question without a quick answer.  I would have to review your report to understand exactly how you can potentially reduce costs.  Nonetheless, I’ll give her a try. Here’s my top 3 ways service providers can reduce their licensing costs –

1. Run multiple instances of SQL on the same VM.  A little blurb in the SPUR states “For each virtual OSE for which you have assigned the required number of licenses….you have the right to run any number of instances of the software in that virtual OSE”  (page 23 of the SPUR for your boredom).  Keep in mind, there’s a difference between running an “instance” and running a VM. 

2. License the Core Infrastructure Suite (CIS) to run Windows and System Center Servers.  If you are reporting System Center and Windows separately….STOP!  System Center needs Windows.  In other words, you have to report Windows regardless; might as well pay less. 

3. Do not report Windows Standard….report Windows Datacenter.  You have the option of running unlimited VM’s with Datacenter edition.  If you are reporting Windows Standard, that means you are not virtualized. Get virtualized.

One more for good measure…

4.  SAL for SA – I still don’t understand why service providers do not report this SKU.  It’s less expensive, your customer can still deploy on premise and in your cloud, and you will be unique.  (I’ve only seen it reported once). 

There are many more ways to reduce spend. (even outside of simply licensing/virtualizing, etc.) There’s too many scenarios to review on a blog post. How about this trade off – If I can reduce your spend, you owe me a beer at a hosting conference. (joke for the record). If I can’t, at least you know your reporting correctly.

Thanks,

SPLA Man

 

 

 

 
1 Comment

Posted by on July 9, 2014 in In My Opinion

 

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License Mobility With Software Assurance – the facts

24 Jun

Here’s another post on license mobility.  I am not purposely trying to be redundant, but majority of compliance issues come from customer owned licenses.  It’s important that you, your sellers, and more importantly your customers understand this program in its entirety. So here we go!

License Mobility, in its simplest terms, is a software assurance benefit that allows customers to migrate their existing licenses to a third-party data center.  Third party data center is a service provider.  (Amazon, Azure, Joe’s Hosting, etc).  Primarily this applies to application servers – Lync, Exchange, SharePoint, and CRM.  It also will include products such as System Center, SQL, and Remote Desktop Services.  I encourage you to check out the Microsoft website http://www.microsoft.com/licensing/software-assurance/license-mobility.aspx for more information.  Since this website is dedicated to the service provider community, I thought I would put together some common mistakes service providers make when deploying license mobility.  Fasten your seat belt, there might be a few surprises in this list.

Fact #1

License Mobility is an addendum to your SPLA.  This is NOT automatically granted.  If your company is not on this list, make sure you sign the addendum!  Download the list here  At a hosting summit several years ago, Microsoft announced this program to a room full of service providers.  You should have seen the look on everyone’s face as they made the announcement; almost hear the thoughts running through their minds “Wait a minute, this wasn’t legal before this announcement!!, We were doing this for years!”  That’s right, if you are hosting customer owned licenses in a shared hardware infrastructure/dedicated VM, make sure the products are license mobility eligible (see the SPUR) and make sure you sign the addendum!  I said this before, if Microsoft allowed all products to be installed on a shared hardware infrastructure, why would they have license mobility?  If you have customers that are bringing licenses into your data center and are not mobility eligible, make sure it’s dedicated.  (VM and hardware)

Fact #2

You need to make sure your end customer submits the verification form.  Why?  It’s a requirement by Microsoft.   Essentially there are three times your end customer should complete and submit a License Verification form:  (This is from the verification form guide).

1. “When you deploy eligible licenses with an Authorized Mobility Partner. A new form is required each time you deploy additional licenses.”

2.” When you renew your Software Assurance.”

3.” When you renew your Volume Licensing Agreement.”

“The form can include multiple enrollments or license numbers under a single agreement, provided that they are supported by the same channel partner. However, you should complete a License Verification form for each agreement under which you are using License Mobility (for example, an Enterprise Agreement and a Select Plus agreement).”

How many verification’s forms have been completed?  Very few if any.  Since this is not completed, you (the service provider) can be on the hook.  If anything else, please make sure you make this mobility guide available to your customer to review.  Check it out here

Fact #3

When end customer use license mobility, they are transferring the licenses into your data center.  When you transfer licenses, they can only transfer the licenses away from your data center once every 90 days.  Good news – you keep the customer for a minimum of 90 days!  So let’s say they decide to go back to their own data center; same story – once every 90 days.  From the License Mobility FAQ Guide.

“Customers must assign licenses for a minimum of 90 days, after which they may move their licensed software from a service provider’s shared servers back to their local servers or to another service provider’s shared servers.  Instances run under a particular license must be run in a single server farm and can be moved to another server farm, but not on a short-term basis (90 days or less). A server farm includes up to two data centers each physically located either in a time zone that is within four hours of the local time zone of the other [Coordinated Universal Time (UTC) and not Daylight Savings Time (DST)], and/or within the European Union (EU) and/or European Free Trade Association (EFTA).”

Fact #4

You need to include educational materials to your customers during the purchasing process.  I did not make this up, it’s part of the addendum you need to sign to take part in the program.  Azure does this via their website http://azure.microsoft.com/en-us/pricing/license-mobility.  Amazon does this as well http://aws.amazon.com/windows/mslicensemobility/ Very few on the partner list makes this readily available on their website.  In fact, out of 10 random selected partners on the list, none have a written statement on mobility.  Perhaps you make this as part of your agreement with your customer; but not sure why you wouldn’t make this as part of your marketing strategy.  If you look up “authorized mobility partners” why wouldn’t you want them directed to your site? To prove my point  I looked up “authorized mobility partners” and only a handful of actual hosters show up in the top searches.  Make it your company.

Fact #5

I’ll make this one short; Windows does not have mobility rights.  You need to report Windows server via SPLA.

I know I am beating a dead horse with license mobility.  I just feel this is a big miss by providers and customers.  The bigger miss is SAL for SA  – check out my old post here

I hope you find these articles helpful.  Have any concerns, questions, or just want a second opinion – feel free to email me at blaforge@splalicensing.com

 

 

 
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Posted by on June 24, 2014 in License Mobility

 

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How the other guys do it

18 Jun

So you want to get in the hosting business.  You start looking around the web and notice that other service providers seem to charge less than what you can charge your customers.  You notice other’s advertising solutions that seem to conflict with the licensing rights.  You are at a loss.  You ask yourself, “how do they do it?”  You ask your reseller who seems just as confused.  So what do you do?  How do THEY do it?

Since this blog is about licensing, I’ll educate you on how other’s save costs based off licensing alone.  I’ll break this down into three parts – Exchange, Mobility, and VDI.  Those are probably the big 3 and more often than not, can make you scratch your head.   I will also add one more, and that’s your reseller.

Exchange Licensing

Exchange is your best friend and enemy. I say that only because it is so important and one of the reasons organization’s move towards the cloud.  They don’t want to babysit an Exchange server anymore, but it’s a must have.  Licensing aside, to deploy Exchange you must have redundancy (God forbid it goes down) you must have infrastructure (they have to receive email as fast as their eyes can focus) and finally administration (dedicate an employee(s) to make sure the former happens).  That’s pricey.  Now the licensing.

Exchange is licensed by user, which means all users who have access to the software needs a license.  To deploy Exchange, you also need Windows.  Windows is licensed by processor.  So let’s say you have 10 users and you provide those users access to your Exchange server. Exchange cost’s $5 per user (hypothetical).  Windows costs $20 for Standard edition or $100 for Datacenter edition.  Because Windows is licensed only by processor (not user) the more users, the less expensive Windows licenses become. See below. (example purposes only)

Hoster with 10 Exchange users on a two processor box

Exchange: $5 per user

Windows: 2*20= 40.  But if we do a per user cost it would equate to $40 divided by 10 ($4 per user for Windows).

The entire Exchange solution is $9 per user.  ($5 for Exchange + $4 for Windows)

Hoster with 1,000 Exchange users on a two processor box with multiple VM’s

Exchange: $5 per user

Windows: $100 per processor or $200 (using Datacenter, 2 processor box – multiple VM’s).  So $200 divided by 1000 users equals $.20 per user.

The entire Exchange solution is $5.20 per user.

So what do you do?  You either fight the good fight – offer something the bigger guys cannot offer – customer service, deployment services, kiss your server good night, etc. or if you can’t beat them…join them.  A lot of big providers offer partnerships in which they will provide the Windows server (think Amazon/Azure) but you provide the Exchange license via your own SPLA.  This is called Datacenter Outsourcing.  Perfectly legal, and part of your signed SPLA agreement.

Mobility

If you really want to get into Exchange hosting – this is the best way to do it.  (in my opinion).  You should offer license mobility.  For a complete definition of license mobility, check out my previous blog post here.  In short, this allows your customer who purchased Exchange with Software Assurance to transfer that license into your datacenter.  All you need to do is dedicate a VM for that customer but install it on shared hardware.  One caveat – you must report Windows via SPLA.  Windows is relatively inexpensive so it could be a win-win.  Just make sure you sign the mobility addendum to legally offer this solution and check with your reseller for eligibility

I also think you should consider SAL for SA.  This allows you (the service provider) to host the solution in a shared environment (VM and Hardware) using the Exchange license your customer purchased with SA.  You still report Windows and SAL for SA SKU via SPLA.  (way cheap by the way).  Difference between SAL for SA and License Mobility is under license mobility they are transferring the license to your datacenter.  Under SAL for SA, nothing is transferred, the original licenses can still be deployed on premise and in your cloud!  Great hybrid situation or ability to provide disaster recovery.  Reach out to me at blaforge@splalciensing.com to learn more

VDI

“I see they advertise VDI!!!”  You look online and see other providers offering VDI as a service.  Well, they are either out of compliant (more probable) or they are using Windows Server and RDS to emulate a desktop via SPLA.  Last option is to have the end customer bring their desktop OS licenses to a datacenter provider.  This is not likely since desktop OS does NOT have mobility rights.  This means the service provider would need to dedicate (server and vm) to one customer.  This is the least likely scenario, since dedicating an environment just for a desktop license makes little sense.

Moral of the story with VDI- there is NO way a service provider can offer a desktop license in a shared environment.
Conclusion

Do you ever wonder why you report licenses to your current reseller?  Is it just out of convenience or do they provide you strategic value?  My advice -don’t work with a reseller out of convenience.    Do they have their own cloud services that directly competes with you?  Hmmm…

Reach out to me at blaforge@splalicensing.com or linkedin.  Would love to review your options or simply offer a second opinion.

Thanks

SPLA Man

 

 

 

 
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Posted by on June 18, 2014 in Disaster Recovery, Exchange, License Mobility

 

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Volume licensing or SPLA?

03 Jun

Here’s another scenario that can help you identify whether you should use SPLA or volume licensing.

Your company leases software developed from a third party but market it as your own.  You modify the software to fit your clients needs, adding plug-ins and other basic functionality, but nothing that changes the software.  You decide to host this application on your servers to your customers.  From a licensing perspective, you want the greatest discount and would prefer to leverage your existing volume licensing agreement.  What do you do?

Unfortunately your reseller is not SoftwareONE; so you decide to listen to your current reseller.  They tell you they should absolutely license this using your volume licensing agreement since this falls under “self hosting.”  Hmmm…but does it?

Let’s take this section by section but first let’s define the term “self hosted.” From the Product Use Rights pages 128 and 129. “…you may run licensed copies of Self-Hosted Applications with your own software to create a unified solution (“Unified Solution”) and permit third parties to use it, subject to the terms below. A Unified Solution also includes any Self-Hosted Applications that interact with your software that is part of the Unified Solution.”  One other criteria – must be marked as ‘Yes’ for ‘Self Hosting of Applications Allowed’ in the license terms and product section.

Some of the requirements according to the Product Use Rights (PUR)

Your software must:

  • add significant and primary functionality to the Self-Hosted Applications that are part of the Unified Solution (dashboards, HTML editors, utilities, and similar technologies are not a primary service and/or application of a Unified Solution);
  • be the principal service and/or application, and sole point of access, to the Unified Solution;
  • be delivered over the Internet or a private network from your datacenter to end users. The Self-Hosted Applications component may not be loaded onto the end user’s device; and
  • be owned, not licensed, by you, except that your software may include non-substantive third party software that is embedded in, and operates in support of, your software.

So let’s break this down into sections.

A. Is it a unified solution?  Yes, it sounds like a unified solution.  You have software that runs on Windows and SQL and all works together.

B. Are the products self hosted eligible?  Yes, Windows and SQL are self hosted eligible according to the products section in the PUR.

C. Delivered over the Internet? Yes, let’s assume it’s delivered over the internet.

D. Be owned, not licensed by you.  Uh oh.  You did not develop this application you are licensing it.  So now what?

Well, that’s where my friend SPLA comes in.  This organization has a volume licensing agreement for their internal employees and now requires SPLA for their hosted environment.  Now comes the issue of deploying the solution.  Can they run the hosted solution on the same hardware they are using internally?  No, you cannot mix your internal licenses for external access.  All hardware running Microsoft software needs to be isolated from what you are using internally.

In conclusion, pay attention to ALL the requirements when deploying a solution.  Just because under products section it says “self hosted eligible” does not mean the solution as a whole is self hosted eligible.  This goes for all solutions, all vendors, and one of the many reasons you need to work with someone who truly understands your opportunity and what you want to accomplish as an organization. Not just today, but where are you going 5 years down the road?  Think for a moment if you would have picked volume licensing instead of SPLA; 5 years down the road Microsoft comes knocking on the door.  How would your customers, your future projects, and your management feel if you picked the wrong licensing solution?

Thanks for reading.

SPLA Man

P.S. I wrote another blog post about Self Hosted and Office.  Check it out here

 
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Posted by on June 3, 2014 in Self Hosted

 
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